Bone morphogenetic proteins (BMPs) are potent secreted signaling factors that function at long- and short-range to impact critical cellular responses during development and homeostasis. Long-range signaling is key to the formation and function of morphogen gradients. Such gradients control the cell fate and tissue allocation and influence the patterning of early embryos as well as later developmental processes. Shot-range signaling sculpts cellular junctions and has been implicated in the growth, development and homeostasis of synaptic junctions, such as Drosophila neuromuscular junction (NMJ). The fly NMJ is a glutamatergic synapse similar in composition and physiology to mammalian central synapses. The fact that individual NMJs can be reproducibly identified from animal to animal and are easily accessible for electrophysiological and optical analysis makes this genetic model system uniquely suited for in vivo studies on synapse assembly, growth and plasticity. In flies, BMP signaling is critical for NMJ growth and neurotransmitter release, and has been implicated in synapse homeostasis via unknown mechanisms. BMP signals via (i) canonical pathway, which activates transcriptional programs with distinct roles in the structural and functional development of the NMJ in response to accumulation of phosphorylated Smad (pMad) in motor neuron nuclei; and (ii) noncanonical, Mad-independent pathway, which connects synaptic structures to microtubules to regulate synapse stability. Intriguingly, pMad also accumulates at synaptic locations but the biological relevance of this phenomenon remained a mystery for over a decade. In recent work we discovered that synaptic pMad is selectively lost at synapses with reduced levels of postsynaptic ionotropic glutamate receptors (iGluRs). Moreover, mutants that lack a particular receptor subtype, GluRIIA, exhibit complete loss of synaptic pMad signals. In contrast, the pMad-positive signals persist in the motor neuron nuclei of GluRIIA mutant animals, and expression of BMP target genes remains unaffected, indicating a specific impairment in the pMad production/ maintenance at synaptic terminals. More importantly, the accumulation of synaptic pMad followed the activity and not the net levels of GluRIIA-containing iGluR complexes (type-A iGluRs). Thus, synaptic pMad appears to function as a local sensor for NMJ synapse activity. Our findings indicate that synaptic pMad marks a completely novel, noncanonical BMP pathway that is genetically distinguishable from all other known BMP signaling cascades. Unlike the BMP retrograde signaling pathway, this novel pathway does not require the BMP7 ortholog, Glass bottom boat (Gbb), but depends on presynaptic BMP receptors and postsynaptic type-A iGluRs. Super resolution studies revealed that synaptic pMad localizes in large clusters at the active zone, in close proximity to the presynaptic membrane, and in perfect juxtaposition with each postsynaptic density. Since pMad is relatively short lived, synaptic pMad likely represents pMad that is locally generated/ maintained by active BMP/ BMP receptor complexes, protected from endocytosis. Intriguingly, selective disruption of presynaptic pMad reduces the postsynaptic levels of type-A receptors, indicating that synaptic pMad functions to stabilize active type-A receptors at synaptic locations. This positive feedback loop provides a molecular switch controlling which flavor of glutamate receptors will be stabilized at synaptic locations as a function of synapse status. We are currently investigating the mechanisms underlying the ability of synaptic pMad to function as an acute sensor and modulator for postsynaptic activity. Since BMP signaling also controls NMJ growth and stability, BMPs may offer an exquisite means to monitor the status of synapse activity and coordinate NMJ growth with synapse maturation and stabilization.